Retailers fear impact of minimum wage rise

Convenience store retailers fear the above-inflation 3% increase to the National Minimum Wage coming into force in October will lead them to cut staff hours.

The government’s decision to raise the minimum wage to £6.70 has been met with concern from some retailers, who feel small business owners will suffer the consequences.

Sanjeev Vadhera, director of North East Convenience Stores, which employs some 300 people across its 22 stores, criticised the government for the above-inflation rate. He added: “We aren’t seeing 3% growth in convenience stores and no one is performing at 3% like for like, so where’s the money coming from? Us.

“It isn’t that I don’t want to pay my staff the extra - it’s that the industry doesn’t pay enough anymore to allow me to do it comfortably. I’m almost certain it will affect our store growth in the future.”

Nicholas Kelly, of My Costcutter Insch, Aberdeenshire, said: “It’s an expense we really could have done without. We’ll have to look at our existing staff, structure and shift patterns, to see if we can make any changes.”

He added that the increase was far too high at a time when food prices were in deflation.

Chris Ward of Eurospar, Milford Haven in Pembrokeshire said he would also be looking to limit staff working hours. He added: “I can’t fault my team, but having to pay them extra means reducing hours, and the result is I will have to take on more hours myself.

“The minimum wage is an unfair reflection of what I earn. I pay myself a salary, but with all the hours I work it ends up being a lot lower per hour than the minimum wage.”

Adam Hogwood of Budgens Broadstairs in Kent said via Facebook: “Keeping a sustainable wage bill is becoming harder. That just adds more pressure on retailers when it’s becoming more of a challenge to compete with price points and tiny margins in the grocery sector. Likelihood: cut hours.”

Opinion

“My staff are great and deserve the extra money - we will just have to really focus on maximising our profit lines to break even. We will just have to continue to deliver great products at great prices.”

Simon Biddle, Biddles Simply Fresh, Redditch, Worcestershire

“We already pay above the minimum wage, so the increase doesn’t bother us too much. Our staff are great and deserve the wages they receive.”

Bruce Morgan of Brownlies of Biggar, South Lanarkshire

What’s in a name?

A number of retailers have argued that the minimum wage should be renamed the more positive ‘National Wage’. Retailers believe that employees may feel underrated being paid ‘a minimum wage’.

Chris Ward of Eurospar, Milford Haven, Pembrokeshire, said: “Minimum is such a negative word; I don’t like having to say we are paying you the minimum wage.”

Nicholas Kelly of My Costcutter, Insch, in Aberdeenshire, added: “The idea of a national wage is great, but calling it a National Minimum Wage is counterproductive.”